MI Legislation Imposing Service Tax on Advice is Repealed

The Detroit Free Press reports the agreement to repeal the 6% tax on some services and replace it with a surcharge on the state’s main business tax came just two months after it was enacted as part of the October 1 deal to address the state budget crisis, but not in time to beat the December 1 effective date. The legislation calls for amnesty and rebates for taxpayers who end up paying the service tax before it is officially removed from state law.

The surcharge will increase business taxation about $750 million a year, replacing the revenue expected from the service tax, the Free Press said. The 21.99% surcharge on the state’s new business tax goes into effect January 1.

Oakland County Executive L. Brooks Patterson said in the news report the service tax might be gone, but he predicts more discord is to come.